Crypto Sell-Off to End Soon as Bitcoin Stabilises, Says JPMorgan

Spot Bitcoin ETFs recorded significant outflows in early January 2026, as shifting macroeconomic expectations and rising geopolitical risks prompted investors to adopt a risk-off stance. Data from SoSoValue showed that Bitcoin ETFs lost $681 million in the first week of the year, with the largest outflow occurring on January 3. Spot Ether ETFs also posted net outflows of $68.6 million during the same period.

The pullback marked a reversal from early January inflows, which totaled $1.17 billion in the first two trading days. Analysts attribute the shift to fading expectations of rate cuts and increased uncertainty, both of which have reduced risk appetite among investors.

JPMorgan analysts have indicated that the aggressive sell-off is nearing its end, with ETF outflows slowing and Bitcoin stabilizing near the $94,000 level. According to Nikolaos Panigirtzoglou, an analyst at JPMorgan, positioning in the futures market suggests that most forced selling should conclude by the end of 2025.

Why Did This Happen?

The recent correction was driven by de-risking rather than structural market failures. Vincent Liu, chief investment officer at Kronos Research, noted that investors are rebalancing rather than abandoning their positions in crypto. The MSCI decision to retain crypto-related companies in its global equity index review helped reduce forced selling pressure.

How Did Markets Respond?

Bitcoin ETF outflows have slowed compared to late 2025, when the market experienced a $20 billion liquidation event. Despite this, the price of Bitcoin has remained stable near $90,500, indicating that buyers are stepping in to meet sellers. This two-way flow suggests that the market is no longer one-sided.

What Are Analysts Watching Next?

Analysts are closely monitoring upcoming U.S. macroeconomic data, including the Consumer Price Index (CPI) and Federal Reserve guidance, for signs of when rate easing could resume. Until these signals become clearer, investors are expected to remain cautious.

Morgan Stanley has added to the crypto market's momentum by filing for a spot Ethereum ETF with a staking component. The move follows its applications for Bitcoin and Solana ETFs, signaling growing institutional interest in crypto assets.

The market's stabilization is also being supported by the absence of large-scale forced selling. JPMorgan noted that liquidity across crypto markets remains robust, which helps prevent sharp, cascading price declines.

Bitcoin's resilience amid ETF outflows indicates that the current price consolidation is not a sign of capitulation but rather a natural pause in the market cycle. This aligns with broader trends observed in institutional positioning, where exposure is being rebalanced rather than exited.